NOTE O

STOCK OPTION PLAN

In 1997, the Company adopted a stock option plan for the benefit
of directors, officers, and other key employees. The number of
shares of common stock reserved for issuance under the stock option
plan was equal to 343,850 shares, or ten percent, of the total
number of shares of common stock sold in the Companys initial
public offering of its common stock. The option exercise price
cannot be less than the fair value of the underlying common stock
as of the date of the option grant and the maximum option term
cannot exceed ten years.

The stock option plan also permits the granting of Stock Appreciation
Rights ("SARs"). SARs entitle the holder
to receive, in the form of cash or stock, the increase in the
fair value of Company stock from the date of grant to the date
of exercise. No SARs have been issued under the plan.







|                     | ExercisePrice | Availablefor Grant | OptionsOutstanding
|-------------------- | ------------- | ------------------ | ------------------
|At Inception         | $17.18        | 343,850            | -                 
|Granted              |               | (275,076)          | 275,076           
|Canceled             |               | -                  | -                 
|Exercised            |               | -                  | -                 
|                     |               |                    |                   
|At December 31, 2000 |               | 68,774             | 275,076           
|                     |               | =====              | ======            

In October 1995, the FASB issued SFAS No. 123, "Accounting
for Stock-Based Compensation." SFAS No. 123 requires the
disclosure of the compensation cost for stock-based incentives
granted after January 31, 1995 based on the fair value at grant
date for awards. Applying SFAS 123 would result in pro forma net
income and earnings per share amounts as follows:



|                          |             |   | 2000  |        
|------------------------- | ----------- | - | ----- | -------
|Net Income (In thousands) |             |   |      
|                          | As Reported | $ | 1,195 |        
|                          | Pro forma   | $ | 607   |        
|                          |             |   |       |        
|                          |             |   | Basic | Diluted
|Earnings per Share        |             |   |      
|                          | As Reported |   | $.60  | $.60   
|                          | Pro forma   |   | .31   | .31    

The fair value of each option is estimated on the date of grant
using the Black-Scholes model with the following weighted-average
assumptions used for 2000 cumulative options earned and outstanding:
Dividend yields of 2.40%; expected volatility of 19.5%; risk-free
interest rate of 6.50%; and expected lives of 10 years for all
options. The calculated value of the options per share was $5.40.
Pro forma figures reflect 30% of the options granted as having
vested.



NOTE P

COMPREHENSIVE INCOME

Comprehensive income was comprised of changes in the Companys
unrealized holding gains or losses on securities available-for-sale
during 2000, 1999 and 1998. The following represents the tax effects
associated with the components of comprehensive income.



|                                        |                               | Years Ended December 31,
|--------------------------------------- | ----------------------------- | ------------------------
|                                        |                               |                         
|Gross Unrealized Holding Gains (Losses) |                               |                         
|                                        | Arising During the Period     | $                       
|Tax (Expense) Benefit                   |                               | (868)                   
|                                        |                               |                         
|                                        |                               |                         
|                                        |                               |                         
|Reclassification Adjustment for (Gains) |                               |                         
|                                        | Losses Included in Net Income |                         
|Tax Expense (Benefit)                   |                               | (96)                    
|                                        |                               |                         
|                                        |                               |                         
|                                        |                               |                         
|Net Unrealized Holding Gains (Losses)   |                               |                         
|                                        | Arising During the Period     | $                       



NOTE Q

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF
1991 (FDICIA) AND FINANCIAL INSTITUTIONS REFORM, RECOVERY AND
ENFORCEMENT ACT OF 1989 (FIRREA)

FDICIA was signed into law on December 19, 1991. Regulations
implementing the prompt corrective action provisions of FDICIA
became effective on December 19, 1992. In addition to the prompt
corrective action requirements, FDICIA includes significant changes
to the legal and regulatory environment for insured depository
institutions, including reductions in insurance coverage for certain
kinds of deposits, increased supervision by the Federal regulatory
agencies, increased reporting requirements for insured institutions,
and new regulations concerning internal controls, accounting and
operations.

FIRREA was signed into law on August 9, 1989. Regulations for
savings institutions minimum capital requirements went into
effect on December 7, 1989. In addition to its capital requirements,
FIRREA includes provisions for changes in the Federal regulatory
structure for institutions, including a new deposit insurance
system and restricted investment activities with respect to noninvestment
grade corporate debt and certain other investments. FIRREA also
increases the required ratio of housing-related assets in order
to qualify as a savings institution.



The regulations require institutions to have a minimum regulatory
tangible capital equal to 1.5% of adjusted total assets, a minimum
3% core/leverage capital ratio, a minimum 4% tier 1 risk-based
ratio, and a minimum 8% total risk-based capital ratio to be considered
"adequately capitalized." An institution is deemed to
be "critically undercapitalized" if it has a tangible
equity ratio of 2% or less. The ability to include qualifying
supervisory goodwill for purposes of the core/leverage capital
and tangible capital was phased out by July 1, 1995.

The following table sets out the Associations various
regulatory capital categories at December 31, 2000 and 1999.



|                          | 2000        | 1999      
|------------------------- | ----------- | ----------
|                          | Dollars     | Percentage
|                          | (Thousands) |           
|                          |             |           
|Tangible Capital          | $24,199     | 16.22%    
|Tangible Equity           | $24,199     | 16.22%    
|Core/Leverage Capital     | $24,199     | 16.22%    
|Tier 1 Risk-Based Capital | $24,199     | 38.87%    
|Total Risk-Based Capital  | $24,619     | 39.54%    



As of December 31, 2000, the most recent notification from
the FDIC categorized the Association as "well capitalized"
under the regulatory framework for prompt corrective action. To
be "well capitalized", the Association must maintain
minimum leverage capital ratios and minimum amounts of capital
to "risk-weighted" assets, as defined by banking regulators.



NOTE R

REGULATORY CAPITAL

The following is a reconciliation of generally accepted accounting
principles (GAAP) net income and capital to regulatory capital
for the Association. The following reconciliation also compares
the capital requirements as computed to the minimum capital requirements
for the Association.



|              | Net Income for the 
    Year EndedDecember 31, 2000 | Capital as ofDecember 31, 2000
|------------- | --------------------------------------------------- | ------------------------------
|              |                                                     |                               
|Per GAAP      | $1,096                                              |                               
|              | ====                                                |                               
|Total Assets  |                                                     |                               
|              |                                                     |                               
|Capital Ratio |                                                     |                               



|         |                       |                    | TangibleCapital | TangibleEquity | Core/ LeverageEquity | Tier 1 
    Risk-BasedCapital | Total Risk-BasedCapital
|-------- | --------------------- | ------------------ | --------------- | -------------- | -------------------- | ----------------------------- | -----------------------
|Per GAAP | $                     | 25,492             | $               | 25,492         | $                    | 25,492                        | $                      
|         | Assets Required       |                    |                 |                |                      |                               |                        
|         |                       | to be Added:       |                 |                |                      |                               |                        
|         |                       | Unrealized Loss    |                 |                |                      |                               |                        
|         |                       | on Securities      |                 |                |                      |                               |                        
|         |                       | Available-for-Sale |                 | (1,293)        |                      | (1,293)                       |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Allowance for Loan    |                    |                 |                |                      |                               |                        
|         |                       | Losses             |                 | -              |                      | -                             |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Regulatory Capital    |                    |                 |                |                      |                               |                        
|         |                       | Measure            | $               | 24,199         | $                    | 24,199                        | $                      
|         |                       |                    |                 | =====          |                      | =====                         |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Adjusted Total Assets | $                  | 149,217         | $              | 149,217              | $                             | 149,217                
|         |                       |                    |                 | =====          |                      | =====                         |                        
|         |                       |                    |                 |                |                      |                               |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Risk-Weighted Assets  |                    |                 |                |                      |                               |                        
|         |                       |                    |                 |                |                      |                               |                        
|         | Capital Ratio         |                    | 16.22%          |                | 16.22%               |                               | 16.22%                 
|         |                       |                    |                 |                |                      |                               |                        
|         | Required Ratio        |                    | 1.50%           |                | 2.00%                |                               | 3.00%                  
|         |                       |                    |                 |                |                      |                               |                        
|         | Required Capital      | $                  | 2,238           |                |                      | $                             | 4,476                  
|         |                       |                    |                 | =====          |                      |                               |                        
|         | Excess Capital        | $                  | 21,961          |                |                      | $                             | 19,723                 
|         |                       |                    |                 | =====          |                      |                               |                        



|              | Net Income for the 
    Year EndedDecember 31, 1999 | Capital as ofDecember 31, 1999
|------------- | --------------------------------------------------- | ------------------------------
|              |                                                     |                               
|Per GAAP      | $1,244                                              |                               
|              | ====                                                |                               
|Total Assets  |                                                     |                               
|              |                                                     |                               
|Capital Ratio |                                                     |                               



|         |                       |                    | TangibleCapital | TangibleEquity | Core/ LeverageEquity | Tier 1 Risk-BasedCapital | Total Risk-BasedCapital
|-------- | --------------------- | ------------------ | --------------- | -------------- | -------------------- | ------------------------ | -----------------------
|Per GAAP | $                     | 27,007             | $               | 27,007         | $                    | 27,007                   | $                      
|         | Assets Required       |                    |                 |                |                      |                          |                        
|         |                       | to be Added:       |                 |                |                      |                          |                        
|         |                       | Unrealized Loss    |                 |                |                      |                          |                        
|         |                       | on Securities      |                 |                |                      |                          |                        
|         |                       | Available-for-Sale |                 | 563            |                      | 563                      |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Allowance for Loan    |                    |                 |                |                      |                          |                        
|         |                       | Losses             |                 | -              |                      | -                        |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Regulatory Capital    |                    |                 |                |                      |                          |                        
|         |                       | Measure            | $               | 27,570         | $                    | 27,570                   | $                      
|         |                       |                    |                 | =====          |                      | =====                    |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Adjusted Total Assets | $                  | 155,911         | $              | 155,911              | $                        | 155,911                
|         |                       |                    |                 | =====          |                      | =====                    |                        
|         |                       |                    |                 |                |                      |                          |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Risk-Weighted Assets  |                    |                 |                |                      |                          |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Capital Ratio         |                    | 17.68%          |                | 17.68%               |                          | 17.68%                 
|         |                       |                    |                 |                |                      |                          |                        
|         | Required Ratio        |                    | 1.50%           |                | 2.00%                |                          | 3.00%                  
|         |                       |                    |                 |                |                      |                          |                        
|         | Required Capital      | $                  | 2,339           |                |                      | $                        | 4,677                  
|         |                       |                    |                 | =====          |                      |                          |                        
|         |                       |                    |                 |                |                      |                          |                        
|         | Excess Capital        | $                  | 25,231          |                |                      | $                        | 22,893                 
|         |                       |                    |                 | =====          |                      |                          |                        



NOTE S

COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Association has various
outstanding commitments and contingent liabilities that are not
reflected in the accompanying financial statements.

COMMITMENTS TO EXTEND CREDIT

The Association is a party to credit related commitments with
off-balance sheet risk in the normal course of business to meet
the financing needs of its customers. These consist of outstanding
mortgage and construction loan commitments and commercial lines
of credit. As of December 31, 2000 and 1999, outstanding mortgage
and construction loan commitments were approximately $955,000
and $2,301,000, respectively. These commitments, normally extended
for thirty days, are for first mortgage or construction loans
at a fixed rate ranging from 6.75% to 9.00%.

EMPLOYMENT CONTRACTS

The chief executive officer and the executive vice-president
of the Association serve under employment contracts that were
approved by the Board of Directors on February 13, 1997. The contracts
were amended on February 10, 2000, to increase the base salaries
and extend the term thereof to February 13, 2003.

OPERATING LEASE

The Association leases an automobile under an operating lease
that expires in July 2003. Total rent expense incurred under this
lease amounted to $4,713, $-0-, and $-0-, for the years ended
December 31, 2000, 1999, and 1998, respectively.

Future minimum rental payments are as follows:



|Year EndingDecember 31, |   | Amount
|----------------------- | - | ------
|2001                    | $ | 8,077 
|2002                    |   | 8,077 
|2003                    |   | 4,711 
|                        |   |       
|Total                   | $ | 20,865
|                        |   |       



NOTE T

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Association is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing
needs of its customers. These financial instruments consist of
commitments to extend credit. These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of
the amounts recognized in the balance sheets.

The Associations exposure to credit loss in the event
of nonperformance by the other party to these financial instruments
for commitments to extend credit is represented by the contractual
notional amount of those instruments (see Note S). The Association
uses the same credit policies making commitments as it does for
on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established
in the contract. Commitments generally have fixed expiration dates
or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being
drawn upon, the total commitment amount does not necessarily represent
future cash requirements. The Association evaluates each customers
creditworthiness on a case-by-case basis. The amount and type
of collateral obtained varies and is based on managements
credit evaluation of the counterparty.



NOTE U

CONCENTRATION OF CREDIT RISK

The Associations lending activity is concentrated within
the southeastern part of Louisiana. In accordance with industry
practices, the Association has deposits in other financial institutions
for more than the insured limit. These deposits in other institutions
do not represent more than the normal industry credit risk.



NOTE V

DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate
the fair value of each class of financial instruments for which
it is practicable to estimate the value:

The carrying amount of cash and short-term investments approximate
the fair value.

For investment securities, mortgage-backed securities, and
collateralized mortgage obligations, fair value is based on quoted
market prices.

For mortgage loan receivables the fair values are based on
discounted cash flows using current rates at which similar loans
with similar maturities would be made to borrowers with similar
credit risk.

The fair value of savings deposits is calculated using average
rates in the market place at the date of the financial statements.

For certificates of deposit, fair value is estimated based
on current rates for deposits of similar remaining maturities.

The fair value of loan commitments is estimated using rates
and fees that would be charged to enter similar agreements, taking
into account (1) the remaining terms of the agreement, (2) the
creditworthiness of the borrowers, and (3) for fixed rate commitments,
the difference between current interest rates and committed rates.

Estimated fair values of the financial instruments are as follows
(in thousands):



|                                   |                                        | December 31, 2000 | December 31, 1999
|---------------------------------- | -------------------------------------- | ----------------- | -----------------
|                                   |                                        | CarryingAmount    | FairValue        
|Financial Assets                   |                                        |                   |                  
|                                   | Cash and Short-Term Investments        | $                 | 3,403            
|                                   | Investment Securities                  |                   | 11,000           
|                                   | Mortgage-Backed Securities             |                   | 4,115            
|                                   | Collateral Mortgage Obligations        |                   | 53,745           
|                                   | Loans (Net of Loan Allowance)          |                   | 74,480           
|                                   |                                        |                   |                  
|Financial Liabilities              |                                        |                   |                  
|                                   | Deposits                               | $                 | 58,879           
|                                   | Advances from Federal Home Loan Bank   |                   | 54,191           
|                                   |                                        |                   |                  
|Unrecognized Financial Instruments |                                        |                   |                  
|                                   | Commitments to Extend Credit           | $                 | 400              
|                                   | Unfunded Construction Loan Commitments |                   | 554              
|                                   | Unfunded Commercial Lines of Credit    |                   | 1                



NOTE W

SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

The following sets forth condensed results of operations for
2000 and 1999 (dollar amounts in thousands, except per share data):





|                                                                                            |                     |         | First |         | Second |         | Third |         | Fourth
|------------------------------------------------------------------------------------------- | ------------------- | ------- | ----- | ------- | ------ | ------- | ----- | ------- | ------
|2000                                                                                        |                     | Quarter |       | Quarter |        | Quarter |       | Quarter
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Interest Income                                                                             | $                   | 2,798   | $     | 2,822   | $      | 2,848   | $     | 2,794  
|Interest Expense                                                                            |                     | 1,367   |       | 1,402   |        | 1,537   |       | 1,570  
|                                                                                            | Net Interest Income |         | 1,431 |         | 1,420  |         | 1,311 |         | 1,224 
|Provision for Loan Losses                                                                   |                     | -       |       | -       |        | 7       |       | -      
|Other Income                                                                                |                     | (58)    |       | (196)   |        | 292     |       | (167)  
|Other Expense                                                                               |                     | 835     |       | 868     |        | 864     |       | 823    
|Income Tax Expense                                                                          |                     | 206     |       | 133     |        | 272     |       | 55     
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            | Net Income          | $       | 332   | $       | 223    | $       | 460   | $       | 179   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Net Income per Common Share (1)                                                             |                     |         |       |         |        |         |       |        
|                                                                                            | Basic               | $       | 0.14  | $       | 0.11   | $       | 0.26  | $       | 0.11  
|                                                                                            | Dilluted            | $       | 0.14  | $       | 0.11   | $       | 0.26  | $       | 0.11  
|Dividends Per Share                                                                         | $                   | 0.09    | $     | 0.09    | $      | 0.09    | $     | 0.09   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|(1) Quarterly per share amounts do not add to total for the year
    ended due to rounding.
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            |                     |         | First |         | Second |         | Third |         | Fourth
|1999                                                                                        |                     | Quarter |       | Quarter |        | Quarter |       | Quarter
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Interest Income                                                                             | $                   | 2,590   | $     | 2,508   | $      | 2,710   | $     | 2,850  
|Interest Expense                                                                            |                     | 1,237   |       | 1,212   |        | 1,363   |       | 1,409  
|                                                                                            | Net Interest Income |         | 1,353 |         | 1,296  |         | 1,347 |         | 1,441 
|Provision for Loan Losses                                                                   |                     | -       |       | -       |        | -       |       | 6      
|Other Income                                                                                |                     | (3)     |       | (8)     |        | 5       |       | 1      
|Other Expense                                                                               |                     | 802     |       | 818     |        | 802     |       | 879    
|Income Tax Expense                                                                          |                     | 200     |       | 161     |        | 130     |       | 259    
|                                                                                            |                     |         |       |         |        |         |       |         |       
|                                                                                            | Net Income          | $       | 348   | $       | 309    | $       | 420   | $       | 298   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|Net Income per Common Share (1)                                                             |                     |         |       |         |        |         |       |        
|                                                                                            | Basic               | $       | 0.13  | $       | 0.13   | $       | 0.18  | $       | 0.13  
|                                                                                            | Dilluted            | $       | 0.13  | $       | 0.13   | $       | 0.18  | $       | 0.13  
|Dividends Per Share                                                                         | $                   | 0.07    | $     | 0.09    | $      | 0.09    | $     | 0.09   
|                                                                                            |                     |         |       |         |        |         |       |         |       
|(1) Quarterly per share amounts do not add to total for the year
    ended due to rounding.





NOTE X

EARNINGS PER COMMON SHARE

Earnings per share are computed using the weighted average
number of shares outstanding, which was 1,976,605 in 2000 and
2,383,168 in 1999.

NOTE Y

CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY





|GS FINANCIAL CORP.                                            
|--------------------------------------------------------------
|CONDENSED FINANCIAL CONDITION                                 
|December 31, 2000                                             
|(Dollars in Thousands)                                        
|                                                              
|ASSETS                                                        
|                                                              
|Cash and Cash Equivalents                                     
|Investments - Available-for-Sale, at Fair Value               
|Mortgage-Backed Securities - Available-for-Sale, at Fair Value
|Investment in Subsidiary                                      
|Loan Receivable                                               
|Dividend Receivable from Subsidiary                           
|Other Assets                                                  
|                                                              
|                                                              
|                                                              
|                                                              
|LIABILITIES AND STOCKHOLDERS' EQUITY                          
|                                                              
|Deferred Tax Liability                                        
|Stockholders' Equity                                          
|                                                              
|                                                              
|                                                              





|GS FINANCIAL CORP.                  
|------------------------------------
|STATEMENT OF OPERATIONS             
|For the Year Ended December 31, 2000
|(Dollars in Thousands)              
|                                    
|                                    
|INTEREST INCOME                     
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|NON-INTEREST INCOME                 
|                                    
|                                    
|                                    
|                                    
|NON-INTEREST EXPENSES               
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|INCOME BEFORE INCOME TAX            
|                                    
|PROVISION FOR INCOME TAX            
|                                    
|NET INCOME                          







|GS FINANCIAL CORP.                            |                                                     
|--------------------------------------------- | ----------------------------------------------------
|STATEMENT OF CASH FLOWS                       |                                                     
|For The Year Ended December 31, 2000          |                                                     
|(Dollars in Thousands)                        |                                                     
|                                              |                                                     
|OPERATING ACTIVITIES                          |                                                     
|                                              | Net Income                                          
|                                              | Adjustments to Reconcile Net Income to Net Cash     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|INVESTING ACTIVITIES                          |                                                     
|                                              | Redemption of IMF Mutual Fund                       
|                                              | Investment in ARM Mutual Fund                       
|                                              | Investment in Other Equity Securities               
|                                              | Principal Paydowns Note Receivable GS Financial ESOP
|                                              | Principal Paydowns on Mortgage-Backed Securities -  
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|FINANCING ACTIVITIES                          |                                                     
|                                              | Purchase of Treasury Stock                          
|                                              | Payment of Dividends                                
|                                              |                                                     
|                                              |                                                     
|                                              |                                                     
|NET DECREASE IN CASH AND CASH EQUIVALENTS     |                                                     
|                                              |                                                     
|CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR |                                                     
|CASH AND CASH EQUIVALENTS - END OF YEAR       | $